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Wednesday

Sep 16, 2009 at 12:01 AMSep 16, 2009 at 4:31 AM

Poverty in the United States is worse than reported.

That’s because the poverty rate is based on the 1955 cost of an emergency food diet. The Associated Press reported it doesn’t take into account rising medical, transportation, child care and housing expenditures or geographical differences in living costs. It also doesn’t factor in noncash aid, tax credits and other government programs.

The National Academy of Science has come up with a formula that factors in these circumstances, and the results are telling.

Using NAS’s formula, the poverty rate, which, for example, is $21,203 for a family of four, would increase from 12.5 percent to 15.3 percent. That means 45.7 million Americans are living in poverty.

The formula is especially revealing when it comes to those 65 and older. The number of Americans in this age bracket living in poverty would almost double, going from 9.7 percent (3.6 million people) to 18.6 percent (6.8 million).

The news service reported that’s because many older people with modest cash incomes would fall below the poverty line under the NAS formula due to out-of-pocket expenses from rising Medicare premiums, deductibles and a coverage gap in the prescription drug benefit that is known as the “doughnut hole.”

But even a revamped poverty formula wouldn’t reflect the number of Americans who are struggling financially. Like those living in official poverty, the working poor can barely make ends meet — and often don’t. They are one unexpected expense away from a financial meltdown.

Philadelphia-based PathWays PA, which provides services and advocacy for women children and families, has broken down what Pennsylvania families must earn to have sufficient income to pay for basic necessities (child care, nutritious food and adequate housing and health care, etc.).

While less that one in 10 Pennsylvania households are consider “poor” according to the federal poverty level, PathWays found that one in five households earn less than they needed to get by. (See its report “Overlooked and Undercounted: Struggling to Make Ends Meet in Pennsylvania.”)

Poverty is a much bigger problem than many Americans realize. It’s time to revamp not just the formula that determines the poverty rate but the way in which we think about this matter.

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